Minister of Public Enterprise Pravin Gordhan welcomes the Eskom debt relief. Image: Eskom.
Budget Speech 2023: Gordhan welcomes Eskom’s debt relief
Minister of Public Enterprise Pravin Gordhan welcomes the Eskom debt relief.
Minister of Public Enterprise Pravin Gordhan welcomes the Eskom debt relief. Image: Eskom.
Public Enterprises Minister Pravin Gordhan welcomes Eskom’s debt relief of R254 billion announced by Minister of Finance Enoch Godongwana today in his Budget Speech.
THE GOVERNMENT IS COMMITTED TO REFORMING ESKOM
This means the government will service Eskom’s debt obligations for the next three financial years (debt capital and interest).
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Furthermore, the government will take up R70 billion in debt from Eskom’s balance sheet, reducing the debt further to sustainable levels.
Gordhan says as of December 2022, Eskom’s debt stood at R422 billion from R396 billion recorded at the end of March 2022.
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BUDGET SPEECH BRINGS RELIEF TO ESKOM
Gordhan says the debt relief announced during the Budget Speech will provide Eskom with a space to utilise cash from operations, increase the maintenance budget, which is critical for improving plant performance, and eventually increase the Energy Availability Factor (AVF).
Improving plant performance is one of the key interventions of President Cyril Ramaphosa’s Energy Crisis Action Plan. The plan was unveiled in July 2022. It was to ensure that Eskom prioritises the maintenance of six top power stations to minimise load shedding.
GORDHAN WELCOMES BUDGET SPEECH DEBT RELIEF FOR ESKOM
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ESKOM CAN’T BORROW IN CAPITAL MARKETS
“During the debt relief period, Eskom will not be allowed to borrow in the capital markets. Therefore, they must continue with the saving programme and drive efficiencies internally to reduce their cost base,” says Gordhan.
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“Eskom’s debt relief is a government commitment to turn around the power utility. We will do everything in our might to reform Eskom and ensure its operational and financial sustainability,” says Minister Gordhan.
